Instead of a big, year-end showdown over taxes and spending, it’s looking as if lawmakers may wind up quietly settling the matter in the coming days, without much fighting or fanfare. The simple fact is, it’s hard to envision anyone choosing to dig in their heels in an ugly stalemate over fiscal matters when the entire nation is grieving the murders of 20 schoolchildren and their teachers.
On Monday, President Obama met again with House Speaker John Boehner – presumably to discuss in earnest the offer Mr. Boehner made over the weekend, in which he agreed for the first time to raise tax rates. According to reports, Boehner’s proposal would raise rates on those earning more than $1 million a year, along with closing some loopholes and eliminating deductions, for a total of $1 trillion in new tax revenues over 10 years.
The proposal also calls for about $1 trillion in spending cuts, at least some of which would come from entitlement programs. In addition, there are reports that Boehner also has agreed to raise the debt ceiling – averting another potential crisis – in return for the broader cuts in spending.
While Democrats say they have some concerns about the proposal (Mr. Obama has been calling for raising tax rates for those earning more than $250,000 a year, and House minority leader Nancy Pelosi has expressed strong opposition to cutting Medicare), it’s becoming clear that a real fiscal cliff deal now appears to be on the horizon.
Not long ago, this breakthrough would have been seen as a big deal. But, understandably, it barely registered amid all the coverage of the Newtown shootings.
And while conservatives and liberals from both parties may not like certain elements of the eventual deal, we don't anticipate them putting up a big fight in the days to come. We could be wrong, of course – in the past, we’ve made a point of never underestimating the far right’s resistance to tax hikes, or the left’s resistance to cutting entitlements. But for Congress to continue to stage a petty, manufactured “crisis” over fiscal matters – at a time when the nation has just experienced a real crisis, with all its heart-rending effects – would, we imagine, not be received well by voters. We think lawmakers get that.
The proposal has the political advantage of not forcing Republicans to actually vote on raising taxes – since they’d simply be letting the Bush-era tax cuts expire for those earning more than $1 million. And they’d get to vote to extend tax cuts for everyone else.
Lawmakers now have an opportunity to make the compromises they need to make for the good of the country, and move on, without all the needless “cliff-hanging” drama. We think there's a good chance they'll take it.